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Instagram sued over its new terms of service

Instagram has been sued over the revised terms of service that it announced last week. The San Diego-based law firm Finkelstein & Krinsk filed its complaint in a San Francisco federal court.

The suit, filed on behalf of Instagram user Lucy Funes, alleges that the new terms breach contract and California business law. While Instagram clarified some of the changes it is making last week and stressed that it does not plan to sell user photos, the class action suit hinges on other matters. From the complaint, also embedded in full below:

“If customers do not agree with Defendant’s scheme, they can cancel their profile with Instagram. However, upon canceling, customers forfeit all right to retrieve the Property that was previously entrusted to Instagram, which retains rights thereto in perpetuity. In short, Instagram declares that ‘possession is nine-tenths of the law and if you don’t like it, you can’t stop us.'”

“[Finkelstein & Krinks attorney William] Restis told me the suit won’t be slowed by the company’s backtrack this week on a much-hyped clause that specified how advertisers could display users’ photos in promoted posts on the site. Instead, he zeroed in on… [a] clause [that] gives the company a “transferable, sub-licensable” license to use your content, as opposed to the “limited” license outlined in Instagram’s current policies. That phrasing is common to several other big social-media sites, but new to Instagram. Restis told me he believes it amounts to an unlawful taking of users’ property rights, particularly when coupled with several other new stipulations that limit Instagram’s legal liability.”

Reuters notes that the new terms of service include a mandatory arbitration clause, “forcing users to waive their rights to participate in a class action lawsuit except under very limited circumstances. The current terms of service, in effect through mid-January, contain no such liability shield,” which is why the suit was filed now.

A Facebook (s FB) spokeswoman said, “We believe this complaint is without merit and we will fight it vigorously.” (Facebook purchased Instagram last April.)